Confirmit, Inc. n/k/a Forsta Inc. v. AND Agency, Inc.

Background

Confirmit and Greenwich Associates ULC entered into a software-as-a-service agreement in 2017. Greenwich later assigned the agreement to AND Agency, Inc., and Confirmit did not object. The agreement restricted assignments without consent, including assignments to a successor that was a direct competitor of the other contracting party. It also allowed immediate termination after a material breach that could not be remedied or was not remedied within 15 days after notice.

Confirmit announced a merger with Dapresy in February 2020. Agency later claimed that Dapresy was a direct competitor and that the merger violated the agreement. Agency sent termination letters in June and July 2020. Confirmit then claimed that Agency breached the agreement by failing to pay quarterly platform fees. Confirmit sued for breach of contract, and both parties moved for summary judgment, which is judgment without a trial when no genuine dispute over an important fact requires a trial.

Court’s Analysis

The court first held that the Confirmit-Dapresy merger constituted an assignment to a successor entity under the agreement. It relied on New York law concerning the legal effect of mergers and on the agreement’s language and purpose. The court therefore ruled in Agency’s favor on that issue, rejecting Confirmit’s argument that no assignment occurred because Confirmit survived the merger and the resulting company retained Confirmit’s name.

The court did not decide whether Dapresy was a direct competitor of Agency. The parties presented conflicting evidence about Dapresy’s services and the companies’ customers, and the court found a disputed material fact. It therefore denied summary judgment to both parties on that issue.

The court also held that Agency did not waive any right it might have had to terminate the agreement. Under the governing New York law, a party may lose the right to terminate after choosing to continue a contract, but it may wait a reasonable time before making that choice. The court found Agency’s delay reasonable because the Confirmit contract was central to Agency’s business and because Agency’s conduct—including planning for a replacement provider, paying for services it had used or expected to use before termination, and directing Confirmit to remove user access—indicated that Agency intended to end the relationship rather than continue accepting the contract’s benefits.

Disposition

The opinion states that Confirmit’s motion was denied in its entirety and that Agency’s motion was granted in part and denied in part. The court specifically ruled for Agency on whether the merger was an assignment and on whether Agency waived its termination right, while denying summary judgment to both parties on the direct-competitor issue. The conclusion then states that the court denied the summary-judgment motions filed by each party and directed the clerk to close the pending motions. The court did not enter a money judgment for Confirmit or dismiss the complaint in the quoted text.